The RBI today asked banks to ensure that customers submit a copy of their PAN card for any cash deposit exceeding Rs 50,000, if it is not already seeded with the account, to ensure tax rule compliance in the wake of the recent decision to abolish Rs 500 and Rs 1,000 notes.
The Reserve Bank said in a notification,
With a view to ensuring compliance with provisions of 114B of the Income Tax Rules, 1962, the banks are advised that anybody depositing more than Rs 50,000 in cash in their bank account has to submit a copy of the PAN card in case the bank account is not seeded with PAN.
Besides that, the RBI has asked banks to insist on their customers sharing their permanent account number (PAN) for all applicable transactions mandated under the I-T rule. The RBI directive follows the government order last week withdrawing the legal tender status of high-denomination (Rs 500 and Rs 1,000) bank notes.
The government had to resort to such a drastic measure in a surprise announcement to curb the menace of black money, check the circulation of fake notes as well as deter the funding of terrorism in the country, Prime Minister Narendra Modi had said on November 8.
As per 114B of the Income Tax Rules, every person is required to quote PAN for all documents pertaining to a time deposit with a bank or co-operative bank, post office, Nidhi or non-banking financial company that is allowed to accept deposits if the amount is more than Rs 50,000 or aggregating over Rs 5 lakh during a financial year. Customers also have to furnish PAN details for all transactions related to the sale or purchase of motor vehicles, opening a bank account, applying for a credit or debit card, opening a demat account and the like.
If a customer pays over Rs 50,000 in cash for paying hotel or travel bills in a foreign country or for buying foreign currency, he has to quote the PAN as well. Payment of over Rs 50,000 towards buying a mutual fund, bonds, bank drafts or pay orders and many other transactions also attracts the same rules, according to the I-T ruling.
The government has been keeping a close vigil on the kind of deposits in bank accounts following the recent order, and those who deposit over Rs 2.5 lakh in cash will be scrutinised.
Want to make your startup journey smooth? YS Education brings a comprehensive Funding Course, where you also get a chance to pitch your business plan to top investors. Click here to know more.
- Narendra Modi
- bank account
- Prime Minister
- Reserve Bank of India
- Income tax in India
- Urjit Patel
- co-operative bank
- Just In